Mark Zuckerberg and other current and former directors and officers of Meta Platforms have agreed to settle a landmark shareholder lawsuit accusing them of allowing repeated violations of Facebook users’ privacy, a lawyer for the plaintiffs told a Delaware judge on Thursday.

The deal, which seeks to resolve claims for up to $8 billion in damages, comes just as the high-profile trial was set to enter its second day in the Delaware Court of Chancery.

“This agreement just came together quickly,” said Sam Closic, the lawyer representing the shareholders, as he informed Chancellor Kathaleen McCormick of the last-minute resolution.

McCormick congratulated both sides and adjourned the trial, which had been expected to run through the end of the following week and include testimony from some of Silicon Valley’s most prominent figures.

Details of the settlement remain confidential, and neither Meta nor lawyers for the defence commented on the resolution. Meta itself was not named as a defendant in the case.

The lawsuit was filed by shareholders against Meta CEO Mark Zuckerberg, venture capitalist and board member Marc Andreessen, former Chief Operating Officer Sheryl Sandberg, and eight other current and former executives. The plaintiffs sought to hold the 11 defendants personally liable for billions in legal costs and regulatory fines paid by the company following years of alleged privacy failings.

Among the most significant was a $5 billion fine imposed by the US Federal Trade Commission (FTC) in 2019, after regulators determined that Facebook had violated a 2012 consent decree requiring it to safeguard users’ personal data. The fine followed the Cambridge Analytica scandal, in which the personal information of millions of Facebook users was harvested without their consent and used to influence political campaigns.

The shareholders alleged that Zuckerberg and other Meta leaders “completely failed to oversee” compliance with the 2012 FTC agreement and knowingly enabled what they described as an “illegal data harvesting operation.” They called on the defendants to reimburse Meta from their personal wealth. The accused executives denied the claims, calling them “extreme.”

Zuckerberg was expected to testify on Monday, with Sandberg to follow on Wednesday. Andreessen, also a defendant, was scheduled to take the stand on Thursday before the case was abruptly halted.

The case also drew in other high-profile figures. Testimony was expected from Peter Thiel, the billionaire co-founder of Palantir Technologies and early Facebook investor, and Reed Hastings, co-founder of Netflix and former Meta board member.

A former Meta board member and current White House Chief of Staff, Jeffrey Zients, testified on Wednesday that the company did not agree to the FTC fine in order to shield Zuckerberg from liability, as the plaintiffs claimed. Also on Wednesday, an expert witness for the plaintiffs criticised Facebook’s privacy framework, pointing to “gaps and weaknesses,” though he stopped short of confirming the company had breached the 2012 agreement.

Critics outside the courtroom expressed disappointment that the settlement may have spared Zuckerberg and other leaders from a public reckoning.

“This settlement may bring relief to the parties involved, but it’s a missed opportunity for public accountability,” said Jason Kint, CEO of Digital Content Next, a trade group for digital publishers.

“Facebook has successfully remade the ‘Cambridge Analytica’ scandal about a few bad actors rather than an unraveling of its entire business model of surveillance capitalism and the reciprocal, unbridled sharing of personal data,” Kint added. “That reckoning is now left unresolved.”

Zuckerberg has rarely testified in open court. A previous 2017 lawsuit by shareholders opposed to his attempt to create a special class of stock was also settled before he could take the stand.

Meta, which rebranded from Facebook in 2021, has said on its website that it has invested billions of dollars into improving privacy protections since the 2019 FTC fine.

Boluwatife Enome

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